diff --git a/registry/coder/modules/vscode-web/run.sh b/registry/coder/modules/vscode-web/run.sh
index e7e18db0..6fc6e7ed 100644
--- a/registry/coder/modules/vscode-web/run.sh
+++ b/registry/coder/modules/vscode-web/run.sh
@@ -22,15 +22,15 @@ if [ "${DISABLE_TRUST}" = true ]; then
   DISABLE_TRUST_ARG="--disable-workspace-trust"
 fi
 
-# Set workspace or folder argument
-WORKSPACE_ARG=""
-if [ -n "${WORKSPACE}" ]; then
-  WORKSPACE_ARG="${WORKSPACE}"
-elif [ -n "${FOLDER}" ]; then
-  WORKSPACE_ARG="${FOLDER}"
-fi
-
 run_vscode_web() {
+  # Determine what to pass as the workspace argument
+  WORKSPACE_ARG=""
+  if [ -n "${WORKSPACE}" ]; then
+    WORKSPACE_ARG="${WORKSPACE}"
+  elif [ -n "${FOLDER}" ]; then
+    WORKSPACE_ARG="${FOLDER}"
+  fi
+  
   echo "👷 Running $VSCODE_WEB serve-local with workspace: ${WORKSPACE_ARG}"
   echo "Check logs at ${LOG_PATH}!"
   "$VSCODE_WEB" serve-local "$EXTENSION_ARG" "$SERVER_BASE_PATH_ARG" "$DISABLE_TRUST_ARG" --port "${PORT}" --host 127.0.0.1 --accept-server-license-terms --without-connection-token --telemetry-level "${TELEMETRY_LEVEL}" "${WORKSPACE_ARG}" > "${LOG_PATH}" 2>&1 &